Shree Ganesh Remedies’ Q2 revenue falls 23%, margin at 16.9%

Shree Ganesh Remedies Limited reported Q2FY27 revenue from operations of Rs 23.29 crore, 23% below Q2FY26, while its EBITDA margin was 16.9%, down 1,483 basis points. Revenue rose 62% from Q1FY27, but EBITDA excluding other income and exceptional items remained 59% lower year on year at Rs 3.94 crore.

Why did Shree Ganesh Remedies’ Q2 revenue fall?

Shree Ganesh Remedies’ Q2FY27 revenue fell as subdued European demand and a difficult operating environment affected the first half, while sales volumes remained below earlier levels. Management said it increased its domestic focus in pharmaceutical intermediates to offset softer exports and had started seeing improved traction from European customers during the quarter.

Revenue from operations was Rs 23.29 crore in Q2FY27, compared with Rs 30.32 crore in Q2FY26, a decline of Rs 7.03 crore. Total income declined 20% year on year to Rs 24.70 crore from Rs 31.00 crore. For H1FY27, revenue from operations was Rs 37.65 crore, 32% below Rs 54.98 crore in H1FY26.

The Q2 sequential recovery did not offset the weak first quarter. Revenue from operations increased by Rs 8.93 crore from Rs 14.36 crore in Q1FY27, but H1FY27 revenue remained Rs 17.33 crore below the comparable H1FY26 period. Management attributed the recovery measures to domestic-market focus and improving European customer traction, rather than stating that export volumes had returned to earlier levels.

Why did Shree Ganesh Remedies’ EBITDA margin decline?

Shree Ganesh Remedies’ EBITDA margin declined because lower volumes and significantly higher, volatile raw-material prices put pressure on profitability, according to management. Earnings before interest, tax, depreciation and amortisation, or EBITDA, excluding other income and exceptional items, was Rs 3.94 crore in Q2FY27, compared with Rs 9.62 crore in Q2FY26.

The EBITDA margin was 16.9% in Q2FY27, versus 31.7% a year earlier, a contraction of 1,483 basis points. Operating expenses declined 6% year on year to Rs 19.36 crore, while revenue from operations declined 23%. The expense reduction therefore did not match the decline in sales during the quarter.

For H1FY27, EBITDA was Rs 7.29 crore, down 57% from Rs 16.92 crore in H1FY26, and the margin was 19.4% versus 30.8%. Finance cost declined 54% to Rs 0.89 crore in H1FY27 from Rs 1.95 crore, while depreciation and amortisation changed marginally to Rs 4.94 crore from Rs 5.01 crore. Profit after tax fell 67% to Rs 2.75 crore from Rs 8.41 crore.

Did Shree Ganesh Remedies improve from Q1FY27?

Shree Ganesh Remedies improved sequentially in revenue and profit in Q2FY27, but its margin fell further from Q1FY27. Revenue from operations increased 62% to Rs 23.29 crore from Rs 14.36 crore, while total income rose 61% to Rs 24.70 crore from Rs 15.30 crore.

EBITDA increased 17% quarter on quarter to Rs 3.94 crore from Rs 3.35 crore, but the margin declined by 644 basis points from 23.3% to 16.9%. Operating expenses rose 76% to Rs 19.36 crore from Rs 11.01 crore, exceeding the 62% rise in revenue. This comparison shows that the sales rebound was accompanied by a faster increase in operating costs.

Profit before tax rose 48% sequentially to Rs 2.26 crore from Rs 1.53 crore, and profit after tax increased 46% to Rs 1.63 crore from Rs 1.12 crore. However, both remained below Q2FY26, when profit before tax was Rs 6.71 crore and profit after tax was Rs 4.96 crore. Earnings per share were Rs 1.28 in Q2FY27, compared with Rs 0.87 in Q1FY27 and Rs 3.86 in Q2FY26.

What do Shree Ganesh Remedies’ balance sheet and cash flow show?

Shree Ganesh Remedies ended H1FY27 with total assets of Rs 210.37 crore, up from Rs 207.74 crore at the end of FY26. Shareholders’ funds increased to Rs 165.79 crore from Rs 163.02 crore, while long-term borrowings declined to Rs 20.62 crore from Rs 21.25 crore and short-term borrowings fell to Rs 5.37 crore from Rs 9.42 crore.

Working-capital balances changed over the period. Inventories increased to Rs 33.53 crore at H1FY27 from Rs 24.01 crore at FY26 end, while trade receivables declined to Rs 21.12 crore from Rs 32.57 crore. Trade payables rose to Rs 14.84 crore from Rs 9.44 crore, and cash and bank balances increased to Rs 17.36 crore from Rs 13.45 crore.

Cash from operating activities was Rs 14.64 crore in H1FY27, compared with Rs 17.66 crore in H1FY26. Cash used in investing activities declined to Rs 5.17 crore from Rs 8.23 crore, while cash used in financing activities was Rs 5.55 crore against Rs 5.73 crore. Net cash flow increased to Rs 3.92 crore from Rs 3.70 crore, taking cash at the end of the period to Rs 17.28 crore from Rs 14.82 crore.

What is Shree Ganesh Remedies planning for recovery?

Shree Ganesh Remedies is pursuing recovery through domestic pharmaceutical-intermediate sales, two newly commercialised intermediates and its contract research and manufacturing services, or CRAMS, pipeline. During Q2FY27, it started commercial production of one intermediate for anti-diabetic applications and another for cardiovascular applications. Management said both received an encouraging domestic-market response and are planned for export markets in coming quarters.

Management expects raw-material costs to ease if geopolitical conditions stabilise and expects margins to normalise as sales return to earlier levels. Those are management expectations rather than reported outcomes. The company also said European-customer traction had improved, but volumes remained below earlier levels during Q2FY27.

In specialty chemicals, Shree Ganesh Remedies completed pilot trials for a South-East Asian project and moved batches into stability testing, with commercial supplies expected from Q1FY28. A second specialty-chemicals product for the same region cleared laboratory trials and entered the pilot stage. In Europe, the company said it was progressing two molecules for pharmaceutical and agrochemical applications, while construction of Block 7A was complete and trials had begun.

Conclusion

Shree Ganesh Remedies’ Q2FY27 results show that revenue recovered sequentially from Rs 14.36 crore in Q1FY27, but the rebound did not repair the year-on-year decline in sales or profitability. Q2 revenue was Rs 7.03 crore below Q2FY26, EBITDA was Rs 5.68 crore lower, and the margin was 16.9% compared with 31.7% a year earlier.

The next disclosed milestone is the expected Q1FY28 start of commercial supplies for the South-East Asian specialty-chemicals project after stability testing. Management’s recovery plan also depends on export launches for two new pharmaceutical intermediates, further European demand traction, volumes returning to earlier levels and potential easing in raw-material costs.